Lockheed Martin's state and local group sold for $825 million

JULY 19'Affiliated Computer Services Inc. today announced plans to buy Lockheed Martin IMS, the state and local unit of Lockheed Martin Corp., for $825 million in cash.

ACS of Dallas this month also acquired the state and local business of Systems and Computer Technology Corp. of Malvern, Pa., for $85 million. ACS provides outsourcing services, including Medicaid fiscal operations, state health care program management, title records and information systems.

"The acquisition of IMS further solidifies our place in this very exciting, fast-growing market and allows us to accelerate the achievement of our long-term objectives," said Jeff Rich, ACS' president and chief executive officer.

IMS will become the fourth largest unit in ACS, Rich said. IMS chief executive John Brophy will head the unit, which will keep its Washington headquarters.

The acquisition will push ACS' overall revenue to $3.1 billion in fiscal 2002, according to company officials. Local government revenue will reach an estimated $1 billion annually as a result of the deal, putting the company on par with IBM Corp. and Electronic Data Systems Corp. in the state and local information technology market.

During its fiscal 2001, which ended June 30, ACS' state and local business generated about $400 million. Revenue from the federal side hit about $700 million, said Harvey Braswell, president of ACS' government services division. During 2000, Lockheed Martin IMS had $580 million in revenue from state and local agencies involved in health and human services, transportation, public safety and child support.